# Unity Software Inc. (U) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-18  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/U/thesis · /stocks/U/memo

## Financial Snapshot

---
ticker: U
step: 04
generated: 2026-05-13
source: quick-research
---

### Unity Software Inc. (U) — Financial Snapshot

#### Income Statement Summary

| Metric | FY2022 | FY2023 | FY2024 | YoY |
|--------|--------|--------|--------|-----|
| Revenue | $1.39B | $2.19B | $1.81B | -17% |
| Gross Margin | ~68% | ~63% | ~67% | recovering |
| GAAP Operating Margin | ~-55% | ~-40% | ~-35% | improving |
| Non-GAAP Operating Margin | ~10% | ~18% | ~20% | improving |
| GAAP Net Income | ~-$0.92B | ~-$0.83B | ~-$0.66B | improving |

*FY2023 revenue boosted by full-year inclusion of ironSource (merged Nov 2022). FY2024 -17% decline: Runtime Fee controversy destroyed developer trust; Grow segment -10%. FY2025: Revenue $1.85B (+2%); DBNER recovered to 103% (from 94%). Q2 2026: Runtime engine data integration into Vector — expected to drive significant ad performance improvement.*

#### Cash Flow & Balance Sheet (FY2024)

| Metric | Value |
|--------|-------|
| Operating Cash Flow | $316M |
| Free Cash Flow | $286M (~16% FCF margin) |
| Capital Expenditures | ~$30M |
| Cash & Equivalents | ~$1.5B |
| Total Debt | ~$2.2B (convertible notes from ironSource merger) |

*Net debt position (~$700M net debt). GAAP losses persist but FCF is positive and improving ($286M FY2024 vs. near-zero in 2023). Q1 2026: FCF $66M (vs. $7M Q1 2025) — dramatic improvement. Non-GAAP adjusted EBITDA $138M in Q1 2026 at 27% margin (vs. 19% in Q1 2025). Heavy SBC (~30% of revenue) is the main GAAP-to-non-GAAP gap.*

#### Key Ratios (approximate)
- P/E: N/A (GAAP losses) | EV/Sales: ~5–6x | FCF Yield: ~3–4%
- Revenue Growth (TTM): ~2–5% | Non-GAAP EBITDA Margin: ~25–27%

#### Growth Profile
Unity was a high-growth story until the 2023 Runtime Fee controversy caused an unprecedented self-inflicted revenue collapse (-17% in FY2024) that destroyed developer goodwill. The recovery has been gradual: FY2025 +2% total revenue, but Vector AI advertising growing 53% while Create Solutions stabilized. The inflection point for Wall Street is the Q2 2026 runtime engine data integration — if Unity can demonstrate that its unique first-party behavioral data (from 50% of mobile games) makes Vector materially superior to AppLovin, it could trigger a significant re-rating from current depressed levels.

#### Forward Estimates
- FY2026: Revenue ~$2.0–2.2B (+8–20% YoY); hinges on Vector Q2 2026 data integration success
- Strategic Grow (Vector) revenue: +48% YoY guidance for FY2026
- Non-GAAP EBITDA margin: tracking toward 28–30% as SBC normalizes
- Mean analyst PT: $32 (64.7% upside from ~$19–20; 28 analysts: 18 Buy / 8 Hold / 1 Sell)
- Potential M&A: China sale speculation (March 2026); strategic review ongoing

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/U/fundamental

## Navigation

- Overview: /stocks/U
- Financials (this page): /stocks/U/financials
- Thesis: /stocks/U/thesis
- Investment Memo: /stocks/U/memo
- Coverage universe: /stocks